Wall Street Wildlife Investing Podcast

It can be exciting to invest in new innovations and it's easy to get carried away with the next big thing. Gartner hype cycles illustrate the typical pattern of new innovation over time, from inception to the peak of inflated expectations, down into the trough of disillusionment, and hopefully up the slope of the enlightenment to the plateau of productivity as the innovation matures. In this week’s pod, we take a look at a few recent hype cycles and talk about some of the innovations that impact our own investments - past, present and future. Many technologies related to connected vehicles have gone over the peak of inflated expectations and are beginning to mature. According to Gartner, electric vehicles and autonomous vehicles are just starting to realise their potential and have a long way to go. However, don’t expect to jump in your flying car any time soon The Internet of Things is mostly at the peak of inflated expectations. There’s a lot of hype but will we see real applications that fulfil the promise of a fully connected world of devices? The use of wearables and digital twins of the person could revolutionize health promotion and disease prevention, but do we really need a kitchen tap connected to the internet? Digital advertising has powered much of the online experience, from social media to video streaming, and the space is evolving quickly. Companies are working to balance the need for privacy and the ability to show targeted ads. However, seeing connected TV advertising near the peak of maximum hype with an estimated 5-10 years to maturity gives us pause on a particular stock in our model portfolio. We are seeing similar changes in digital marketing as the world increasingly moves towards a digital future, but we are surprised to see mobile wallet marketing sliding into the trough of disillusionment. The use of digital payments is growing at a rapid pace, and we’re starting to see new ways it can affect consumer behaviour. Imagine if the money in your digital wallet expired and you had to use it or lose it? It's easy to get caught up in the hype, and one place where we have done that ourselves is in the sector of 3D printing. We invested during the time of maximum hype, and have seen the value of our investments get decimated as reality set in. We finally sold out after years of broken promises, however, Gartner believes 3D printing in manufacturing operations is starting to progress towards maturity and productivity. Did we exit our 3D printing stocks too early? The following companies are mentioned in this episode: Facebook (FB), Apple (AAPL), Alphabet (GOOGL), Snap (SNAP), Vuzix (VUZI), Unity (U), CrowdStrike (CRWD), Cloudflare (NET), Fastly (FSLY), Tesla (TSLA), Teladoc Health (TDOC), Magnite (MGNI), The Trade Desk (TTD), IZEA Worldwide (IZEA), 3D Systems (DDD), Stratasys (SYS), ExOne (XONE) ----- If you enjoyed this episode, please consider subscribing to the Telescope Investing website at https://telescopeinvesting.com/subscribe/ Or you can contact the hosts Luke & Albert at https://twitter.com/LukeTelescope https://twitter.com/AlbertTelescope

It’s been a rocky start of the year for the stock market, especially for growth stocks. Back in January, we picked a portfolio of 15 stocks covering eight megatrends as our core stock investments for 2021. In this week’s episode, we check in with the model portfolio and see how our picks have performed in the first quarter, but more importantly, how the businesses have fared and whether or not the investment theses have changed. The portfolio performance is shared more fully at https://telescopeinvesting.com/podcast-33-model-portfolio-q1-review/. ----- If you enjoyed this episode, please consider subscribing to the Telescope Investing website at https://telescopeinvesting.com/subscribe/ Or you can contact the hosts Luke & Albert at https://twitter.com/LukeTelescope https://twitter.com/AlbertTelescope

This week we take a deep-dive into another potential hypergrowth stock-pick, Nano-X. This was a fun episode to record, and we both changed our minds twice about whether it was a smart buy or just tantamount to setting our money on fire, during the episode research! Nano-X Imaging promises to make medical imaging more accessible and more affordable for everyone. They have developed a new type of X-ray technology that is smaller, lighter and less expensive to manufacture and operate, and an innovative pay-per-scan business model. However, with no earnings, no sales and as yet, no regulatory approval, is this revolutionary technology too good to be true? Two-thirds of the world’s population does not have easy access to medical imaging. With its new energy-efficient X-ray technology and innovative pay-per-scan business model, Nano-X is hoping to make this potentially life-saving service available to urgent care centres, outpatient clinics and rural areas all over the globe Using a semiconductor-based digital X-ray source, Nano-X has developed an X-ray tube that is less expensive to manufacture, smaller, lighter, and able to work at room temperatures, removing the need for large and expensive cooling components. The Nanox.ARC is a medical imaging device using their new X-ray technology and is estimated to cost $10K-15K, compared to $1M-3M for traditional X-ray machines They are innovating with an MSaaS (medical screening as a service) business model, where machines are provided for free or at low cost, and revenue is received per scan. Scans are estimated to cost $40 each on average (compared to $300 for a traditional X-ray), of which Nano-X receives $14 and the remainder is kept by the service provider. Contracts with minimum scan volumes result in a reliable recurring revenue stream Nano-X has contracts to deliver 5,150 Nanox.ARC systems with 9 service providers in 13 countries, and agreements (no obligation) with USARAD and SK Telecom to deliver a further 3,000 and 2,500 units respectively. They aim to deliver 1,000 units in the first quarter of 2022, and a total of 15,000 units by 2024, which would result in a minimum annual revenue of $400M The Nanox.ARC machines will be connected to the Nanox.CLOUD, an online service that allows scans to be shared with specialists across the world in near realtime. This is standard practice in many developed countries, but this may be extremely beneficial for regions that do not have this capability and do not have local radiologists A 510(k) application for a single-source imaging device was submitted to the FDA in January of 2020 and a decision is expected soon. A 501(k) clearance allows a device to be marketed as safe and effective and is equivalent to an existing legally marketed device. Even with FDA clearance, there are many challenges to overcome to bring the product to market Nano-X demonstrated the technology in a live stream at the Radiological Society of North America (RSNA) meeting in Nov 2020. However, there remains debate over whether or not the technology is real. Will Nano-X disrupt the global medical imaging industry or go down in flames as the next Theranos? ----- If you enjoyed this episode, please consider subscribing to the Telescope Investing website at https://telescopeinvesting.com/subscribe/ Or you can contact the hosts Luke & Albert at https://twitter.com/LukeTelescope https://twitter.com/AlbertTelescope

This week, we do a deep-dive into another stock in our model portfolio for 2021, Teladoc Health, a leader in telehealth and digital therapeutics. Teladoc’s mission is to create a virtual healthcare system to improve care and cut the cost of healthcare for all. They have grown revenues rapidly over the last three years, boosted in part by the global pandemic, but do they have what it takes to fend off the increasing competition chasing them from the rear? Many conditions do not require an in-person visit to a physician and can be held remotely, offering convenience, time-savings, safety, often at a lower cost. On average, a patient can see a physician within 10 minutes of their first enquiry. Teladoc started with general wellness and has expanded its range of services to include dermatology, nutrition and mental health Healthcare is a $9T market globally, with $3.6T in the US. It is estimated that $250B of healthcare spending could be virtualised in the US alone, with the market expected to grow 22.4% per year until at least 2028. Teladoc’s revenue is currently less than 0.5% of the projected US market Teladoc Health is the largest telehealth provider in the US and has started expanding internationally with operations in the UK, France, Australia, Canada, Spain, Portugal, Hungary, China, Chile and Brazil. It has over 50,000 clinicians in its network globally, and its services are accessible from over 130 countries and are available in more than 40 languages. Teladoc ended 2020 with 51.8M paid US members after adding 15M in 2020 Teladoc's merger with Livongo Health last year brought remote monitoring and digital therapeutics into their suite of services, using connected devices and artificial intelligence to help patients manage their chronic conditions better. As well as cross-selling services, the synergy of telehealth and remote monitoring may be a game-changer for preventative medicine At the end of 2020, Livongo had 600,000 chronic care enrolments, which is a fraction of the 31M people in the US with diabetes, and the 147M living with one or more chronic conditions. They started with diabetes and have expanded their capabilities to include hypertension, prediabetes, weight management and behavioural health However, competition is increasing both from traditional healthcare companies plus tech giants such as Amazon and Google. Platforms like Zoom and Twilio have HIPAA-compliant video conferencing which can be used to provide telehealth services. Teladoc is the current leader with agreements with 40% of Fortune 500 companies, but they cannot rest on their laurels in this rapidly innovating space ----- If you enjoyed this episode, please consider subscribing to the Telescope Investing website at https://telescopeinvesting.com/subscribe/ Or you can contact the hosts Luke & Albert at https://twitter.com/LukeTelescope https://twitter.com/AlbertTelescope

When investing in individual stocks, it helps if the companies that you choose align with your interests and your values. This week, Luke and Albert talk about some of the businesses that they prefer not to invest in, and the reasons why. With interest rates of up to 5,000%, it's hard to argue that payday lenders are not exploitative, and more recently, 'buy now, pay later' businesses are emerging to lead consumers to live beyond their means It's clear from what they wear that Luke and Albert know nothing about fashion. In an industry where consumer trends can change quickly, not knowing what’s in and what’s out can lead to bad investing decisions We all like food, but the restaurant business is tough with low barriers to entry, high levels of competition, low margins and shifting consumer preferences. The industry is facing new challenges from national lockdowns and having to rapidly adapt to food delivery as the norm 'Middleman' businesses - estate agents, travel agents, recruitment agents, and their like - are being squeezed from both sides. Consumers are getting smarter, and companies are using technology to reach their customers directly The best-performing stocks of the last century were tobacco stocks and it’s not even close. $1 invested in the tobacco sector in 1900 would be worth over $6M today. Even with returns like these, many investors stay away due to their distaste for businesses that actively kill their customers ----- If you enjoyed this episode, please consider subscribing to the Telescope Investing website at https://telescopeinvesting.com/subscribe/ Or you can contact the hosts Luke & Albert at https://twitter.com/LukeTelescope https://twitter.com/AlbertTelescope

This week, we begin our search for hypergrowth stocks, smallcap and microcap companies with the potential of delivering 10X returns or higher. We set out some thoughts on the criteria we'll use in this search, and deep-dive a new player in the megatrend of streaming entertainment, CuriosityStream, as a potential hypergrowth stock. CuriosityStream is an online video streaming service specialising in factual content, covering subjects across science, history, technology, nature, society and lifestyle. They own most of their content and have over 3,000 titles. Their aim is to expand this to 12,000 titles over the next 5 years Founded by industry veteran John Hendricks, the founder and former CEO of Discovery Communications, the parent company of the Discovery Channel, Animal Planet and the Learning Channel. Hendricks has packed the management team with experience in the entertainment and media industry The company has multiple revenue streams from direct subscriptions, bundled subscription, program sales, ads, and corporate partnerships. They are also targeting the corporate social responsibility programming market worth an estimated $20B annually Producing factual content costs a fraction of the cost of a drama, about 10% on average. Is also more easily translated to other languages, more likely to play well in multiple markets, and typically has a much longer lifespan than other types of programming. This has allowed CuriosityStream to keep their subscription fees low, at $3/month or $20/year They're unlikely to be the primary streaming TV service for any household, but may be a secondary niche service that many households will choose, especially those with children given the educational content and learning opportunities. The low subscription fee keeps it affordable, and this is borne out by the fact that most of the subscribers choose the annual plan As of the end of Q3 2020, they had over 13 million subscribers in 175 countries with a low churn rate of 2.6%. The number of subscribers is a 108% increase year-over-year, and they expect their subscriber count to reach 80M by 2023 The video streaming market is projected to reach $71B in 2021 and grow to $108B by 2025, with user penetration growing from 12.9% to 18.2%. CuriosityStream revenue for 2020 is projected to be $40M, with revenue guidance of $390M in 2025 Revenue growth in 2019 was 93.6% and the projected revenue growth is 119% for the full year in 2020 and 83% for 2021. The business is not yet profitable but is expected to become free cash flow positive by 2024 The tremendous growth, low market cap, and early penetration of their total addressable market makes CuriosityStream a strong candidate for a Telescope Investing hypergrowth stock. Take a listen to today's episode to hear whether we picked it for our own portfolios. ----- If you enjoyed this episode, please consider subscribing to the Telescope Investing website at https://telescopeinvesting.com/subscribe/ Or you can contact the hosts Luke & Albert at https://twitter.com/LukeTelescope https://twitter.com/AlbertTelescope

With mobile devices, connected homes, connected vehicles, the internet of things, and 5G networks, our demand for data is growing rapidly year-over-year, requiring ever-increasing speed, reliability and security. In this week's Pod, we put two fast-growing content delivery networks, Cloudflare and Fastly, head-to-head to decide which one is the better investment right now. Cloudflare and Fastly are both leading the evolution of edge computing, bringing not only data but processing closer to the end-users. Having computing resources at the edge improves latency and speeds, enabling new applications such as connected autonomous vehicles and cloud gaming. Cloudflare has over 200 points of presence (PoPs) in over 100 countries, putting 99% of the connected population within 100ms of the edge. While Fastly has 60 PoPs in 26 countries with their ultra-high-performance technology. The total addressable market is estimated to reach $117B by 2025, as both companies expand out of their content delivery origins into edge computing and network security. With annual revenues of $300M-$400M, there's a lot of runway for both companies to continue to grow. Both Cloudflare and Fastly have rich valuations, but Cloudflare is currently priced significantly higher. Does Cloudflare’s business performance justify this difference or is Fastly a relative bargain? ----- If you enjoyed this episode, please consider subscribing to the Telescope Investing website at https://telescopeinvesting.com/subscribe/ Or you can contact the hosts Luke & Albert at https://twitter.com/LukeTelescope https://twitter.com/AlbertTelescope For useful further reading see: https://softwarestackinvesting.com/fastly-fsly-q1-2020-earnings-results-review/ https://hhhypergrowth.com/flare-ups/

In response to a listener question, this week we discuss investing in Hong Kong and Asia. Albert shares his approach to finding and researching local stocks as a non-native speaker, and highlights some of the key megatrends that driving his Asia investments. We also review a number of Hong Kong and China companies, as Luke begins to plan his own investments in the region. The Hong Kong stock market is one of the most active in the world, with an average daily trading volume over half that of the New York Stock Exchange, providing an active and liquid market with a vibrant IPO scene China is the second-largest economy after the US and continues to grow quickly, and their 5-Year Plans may give clues on future growth areas In some areas, China is ahead of the west with wider adoption of technologies such as electric vehicles, renewable energy and electronic payments Megatrend investing is as applicable in Hong Kong and China as it is anywhere else. Regional trends sometimes become global trends, and it helps to keep an eye on what's happening around the globe Investors have an advantage in their home market as they will often hear of promising local companies before global investors, and may be able to get a head start and invest early ----- If you enjoyed this episode, please consider subscribing to the Telescope Investing website at https://telescopeinvesting.com/subscribe/ Or you can contact the hosts Luke & Albert at https://twitter.com/LukeTelescope https://twitter.com/AlbertTelescope References: This week Luke read RESET: How to Restart Your Life and Get F.U. Money by David Sawyer

This week, we take a step back and look at how we manage our own stock portfolios, distilling out the principles that have allowed us to achieve market-beating returns over the long-term. We believe it boils down to three primary skills - your ability to manage your temperament, your ability to manage your portfolio as a whole, and finally your ability to choose good quality companies. Managing yourself Avoid emotional investing and acting on impulse, whether it’s from greed or fear. Have a plan and respond to market conditions accordingly Be humble and realise you can't know everything when it comes to an investment. Collaborate and share your thinking, and be open to challenge. Don’t get too proud of yourself over your winners, or too despondent over your losers - learn and move on Invest in a way that allows you to sleep at night and have peace of mind. The point of investing is to be free of money worries, not to be the cause of them Managing your portfolio The key to balancing risk and reward is how you allocate your portfolio across different asset classes, different sectors and different stocks Diversify your stocks across different sectors, market caps and where possible, geographical revenues, and yet don’t have so many stocks that your portfolio starts to resemble an index A particular investment is not suitable for everyone. Structure your portfolio based on your financial goals and your appetite for risk, not someone else’s Managing your stocks Do your own due diligence! Understand what you’re investing in, and build conviction in the companies that you own. You're investing in companies not trading in tickers Invest in the companies whose mission you love and want to support with your investment $. It’s easier to stay the course when your portfolio is aligned with your values and interests Use a framework to assess companies and businesses objectively, so that you can maximise your chances of identifying the winners of the future ----- If you enjoyed this episode, please consider subscribing to the Telescope Investing website at https://telescopeinvesting.com/subscribe/ Or you can contact the hosts Luke & Albert at https://twitter.com/LukeTelescope https://twitter.com/AlbertTelescope References: We really like AdventuresinFI's framework for considering whether you should sell an investment, available at: https://adventuresinfi.substack.com/p/on-discipline-and-process

Superbowl Sunday has some of the most coveted ad spaces in the business, with 30-second slots commanding over $5M each. But what if advertisers could target their spend, and viewers at home could see different adverts depending on their interests? In this week’s episode, Luke & Albert talk about programmatic advertising, and deep dive into a fast-growing player in this space, Magnite. The loss of live sports during the pandemic has accelerated cord-cutting and the move from linear TV to connected TV, which is driving the adoption of programmatic advertising, as ad-supported services complement subscription services It’s not just connected TV that can benefit from programmatic advertising - desktop, mobile, podcasts, and potentially video games, virtual reality and augmented reality could offer ad-supported models for consumers to receive free content in exchange for receiving adverts tailored to their interests Magnite is the world’s largest independent supply-side platform (SSP) for programmatic advertising, which holds auctions for ad space in real-time, allowing publishers to maximise their ad revenue, advertisers to reach their target audience, and consumers to see more relevant ads Publishers and advertisers are increasingly turning to independent platforms to avoid conflicts of interest with the ad platform itself. Walled gardens such as Google and Amazon often have their own products and services to promote Working with the leading demand-side programmatic ad platform, The Trade Desk, Magnite will adopt Unified Id 2.0 to allow targeted ads in exchange for free content, bypassing the need for 3rd-party cookies, and protecting user privacy In 2020, CTV accounted for 29% of TV viewing in the US but only captured 3% of the total TV ad budget. With CTV viewing increasing and linear TV decreasing, this gap is not likely to hold for long, and the recent acquisition of SpotX enhances Magnite’s presence in the connected TV advertising market, especially in live sports and live news ----- If you enjoyed this episode, please consider subscribing to the Telescope Investing website at https://telescopeinvesting.com/subscribe/ Or you can contact the hosts Luke & Albert at https://twitter.com/LukeTelescope https://twitter.com/AlbertTelescope